SodaStream International, formerly known as Soda Club, filed yesterday for an initial public offering on the Nasdaq. The Israeli company, which makes devices to carbonate drinks in the home, filed a registration statement with the U.S. Securities and Exchange Commission to hold an initial public offering on Wall Street, from which it expects to realize $81.6 million by selling 4.7 million shares.
SodaStream stated in its regulatory filing that the IPO will probably price between $18 and $20 per share. Its estimation of proceeds is based on an offering price of $19 per share, the midpoint of its anticipated price range.
One of the big winners from the offering will be Fortissimo Capital, a private equity fund that has invested some $7-$8 million in SodaStream in 2006 and 2007. After the IPO, Fortissimo will hold about 31.7% of the company's shares, which will be worth approximately $106 million - at a market value for SodaStream of $334 million.
SodaStream plans to list its shares on the Nasdaq Global Market under the SODA ticker symbol. The company is the fourth Israeli firm to issue on Wall Street in 2010: D-Medical, Veringo and MediMind have already had their IPOs. Wintegra has also filed a shelf prospectus, but the IPO will most likely not happen as the company may be bought out.
The company reported 2009 revenues of 105 million euros and a net profit of 7.1 million euros, up from 99.9 million euros and 530,000 euros respectively in 2008. It lost 1.6 million euros in 2007, and as a result a new CEO, Daniel Birnbaum, was brought in.
But both revenues and profits are on the rise in 2010. For the first half of the year, revenues reached 68.7 million euros and net profits were 4.2 million euros.
SodaStream has over 1,000 employees, about 700 of which are in Israel. Its headquarters are in the Airport City complex near Ben-Gurion Airport. It sells its products in 39 countries and in over 35,000 stores.
As to profits, SodaStream has operating profit margins of 25%. The company's best quarter is usually the second one of the year, as consumers prepare for quenching their summer thirst - and buy the firm's home beverage carbonation systems, which are meant to help consumers convert tap water into carbonated soft drinks and sparkling water. Over half its revenues come from the sales of flavored syrups and the refillable bottles, with most of the rest of its revenues coming from the carbonation machines.
In western European markets, the company has 5% to 15% penetration of households; Sweden is its best market with a 20% penetration rate. Western Europe accounts for almost 68% of revenues.
SodaStream's next strategic target market is the U.S. The company is also looking to market its returnable and refillable bottles as environmentally friendly. The company plans to use the offering's proceeds to pay back approximately $33.2 million owed to financial institutions; to repay about $1.9 million owed to shareholders; to pay approximately $34 million in costs related to building or buying another manufacturing plant; and to pay a one-time $2.4 million termination fee to Fortissimo Capital Fund GP for ending a management services contract. Remaining funds will be used for working capital and other general corporate purposes.
The company also said in the filing it may use all or some of the proceeds to buy or invest in complementary businesses, products or technologies.
SodaStream anticipates that it will have approximately 17.7 million outstanding shares after the offering.
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